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Supply Response to Policy Changes: Evidence from Indian Oilseeds Sector

Author

Listed:
  • D. Suganthi

    (Department of Economic and Policy Research, Reserve Bank of India)

  • Rishabh Kumar

    (Department of Economic and Policy Research, Reserve Bank of India)

  • Prachi Rojh

    (Glencore India Pvt Ltd)

  • N. Arun Vishnu Kumar

    (Department of Economic and Policy Research, Reserve Bank of India)

Abstract

Despite increasing oilseeds production, India imports more than half of its edible oil consumption. Dependence on imported edible oils results in price fluctuation, affecting consumers and producers. This study aims to identify key price and non-price drivers of the oilseed supply response using the Nerlovian supply response model. The findings reveal that global prices during sowing months, own support price and that of competitive crops, lower cost of cultivation and higher profitability boost domestic acreage. In the long run, development of irrigation infrastructure and high-yielding varieties are imperative for increasing production. Furthermore, the paper explores the factors that affect farm business income and demonstrates that, historically, improvement in productivity has supported farmers’ income, despite unfavourable trends in market pricing.

Suggested Citation

  • D. Suganthi & Rishabh Kumar & Prachi Rojh & N. Arun Vishnu Kumar, 2025. "Supply Response to Policy Changes: Evidence from Indian Oilseeds Sector," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 23(2), pages 577-599, June.
    • Handle: RePEc:spr:jqecon:v:23:y:2025:i:2:d:10.1007_s40953-024-00434-6
    DOI: 10.1007/s40953-024-00434-6
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    References listed on IDEAS

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    1. K. L. Krishna & J. V. Meenakshi, 2022. "Agricultural Productivity Growth and Structural Transformation in Rural India: Some Recent Evidence," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 20(1), pages 277-302, September.
    2. Bingxin Yu & Fengwei Liu & Liangzhi You, 2012. "Dynamic Agricultural Supply Response Under Economic Transformation: A Case Study of Henan, China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 370-376.
    3. Kalkuhl, Matthias & von Braun, Joachim & Torero, Maximo, 2016. "Food Price Volatility and Its Implications for Food Security and Policy," MPRA Paper 72164, University Library of Munich, Germany.
    4. G. Mythili, 2006. "Supply response of Indian farmers: Pre and post reforms," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2006-009, Indira Gandhi Institute of Development Research, Mumbai, India.
    5. G. Mythili, 2006. "Supply Response of Indian Farmers - Pre and Post Reforms," Microeconomics Working Papers 22412, East Asian Bureau of Economic Research.
    6. Matthias Kalkuhl & Joachim von Braun & Maximo Torero (ed.), 2016. "Food Price Volatility and Its Implications for Food Security and Policy," Springer Books, Springer, number 978-3-319-28201-5, March.
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